News
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
view the rest of the comments
This ignores the difference after 5-10 years. Rent keeps going up.
Maintenance cost and property taxes too though.
Still cheaper to own, if you have the initial funds or loan to buy and know you won't be leaving the area for awhile. If you rent a property those maintenance and tax and insurance and interest costs associated with owning it are just passed on to you in to your rent, plus a profit margin so the owner can make money off renting it out to you. Owning the same property would cost less, over time, and not just that, but you would have something to show for it.
What you forget is the cost of opportunity: the money that is stuck in a house is money that would yield income if it was invested somewhere else. Long term stock markets typically return 7%+, while rental return (or the rent you save by buying) can be anywhere from 3 to 7% depending on market, minus maintenance and other holding costs.
So there's no fast and hard guarantee that owning or renting is best - you need to run a proper simulation with the right parametres taking everything into account. In markets with low rental returns, renting is typically optimal.
Seems like inflation goes up faster than long term stocks, especially in 2025-2028
Where is the money that is stuck in the house, that would hypothetically be able to be invested if not spent on the house? You have to pay to live somewhere, and if you're paying less to purchase than rent, that is money saved which is available to invest. Do you mean the up-front downpayment money needed to acquire a mortgage in the first place (typically 10-20% of the purchase cost), that could be invested in the market instead for a higher return than slowly building equity through principal payments?
Let me give you an overly simplified example. You are in a property market where rental yield is 3% (happens in some cities)
You could put a million dollar into buying a house and save $30k in rent every year
or
You could rent a million dollar house for $30k, and invest your million dollar in the market at 7%, returning $70k per year
Obviously this gets more complicated with mortgages, taxes, maintenance, interest rates, etc. but the gist of it is that owning your home always comes with an opportunity cost, every dollar of house equity is a dollar that isn't invested somewhere else. Depending on circumstances, renting might be the most economical choice.
This is interesting. I do get that if you have initial money to buy a house outright, there are better mostly safe things you can invest in, to get a higher return on investment than a house. If I got a 30 year mortgage in 1994 and paid $1M over that time to pay it off on say, a 5% fixed rate with no PMI or downpayment required, the purchase price was probably closer to $500K assuming 2.5% average annual inflation. And average housing inflation since then was more like 2.8%, so factoring in maintenance and taxes and insurance, guessing no real appreciation over that time. But the quality of life difference to an apartment of the same cost would I think in most cases more than make up for it.
I think where I'm stuck is, we're starting from the idea of having $1M in hand to start out with to buy a house outright or rent + invest, where a much more common situation is either: I have not got anything saved up, so I can neither invest nor get a mortgage without an initial downpayment; or else, I have enough saved up for a downpayment or PMI and hopefully a secure enough income to pay the mortgage every month.
In my case, mortgage + escrow + maintenance costs are still less than half what I was paying for my cheapest studio apt nearly a decade later, and a much better quality of life because of the extra savings. My neighbors are renting a nearly identical house, and it's criminal how much they have to pay to stay there. I wouldn't be able to afford rent here.
What even is maintenance?
Leaky roof? Nah, throw some clear tarp over it and you’ve got a sun roof.
Tenants better appreciate the improvement. If they don't, their rent should be raised!
Thousands per year, usually.
My rent went down year over year.
I bet you also think you pay income taxes cause they take it out of every check and then fail to connect the dots they gave it all back and then some during tax season.
What is your mortgage on the tent?